Customs and Excise Law (Amendment No. 6) 200-.

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A decision made (02/04/08) regarding: Customs and Excise Law (Amendment No. 6) 200-.

Decision Reference: MD-HA-2008-0020
Decision Summary Title :	Customs and Excise Law (Amendment No 6) 200-		Date of Decision Summary:	28 March 2008
Decision Summary Author:	Heidi Sydor Executive Officer		Decision Summary: Public or Exempt?	public
Type of Report: Oral or Written?	written		Person Giving Oral Report:
Written Report Title :	Customs and Excise Law (Amendment No 6) (Jersey) Law, 200-		Date of Written Report:	17th January 2008
Written Report Author:	Mr R Whitehead Principal Legal Adviser		Written Report : Public or Exempt?	public
Subject: Customs and Excise (Amendment No. 6) (Jersey) Law 200-
Decision(s): The Minister approved the draft Customs and Excise (Amendment No. 6) (Jersey) Law 200- for lodging ‘au Greffe’ for debate on the 17th June 2008; and also signed the Statement of Compatibility with the Human Rights (Jersey) Law 2000.
Reason(s) for Decision: The draft Law amends the Customs and Excise (Jersey) Law 1999 by inserting new provisions designed to implement, in part, Special Recommendation IX on Terror Financing of the Financial Action Task Force (“FATF”). The new provisions cover the cross-border elements of the requirements; other elements, relating to seizures of cash suspected of being related to criminal activity within the Island will be implemented by means of the draft Proceeds of Crime (Cash Seizures) (Jersey) Law 200-, which was adopted by the States at the end of 2007.
Resource Implications: It is not possible to predict the resource implications of the proposed amending Law with any accuracy, but a significant increase in resource requirements would seem unlikely. The situation will be monitored post implementation
Action required: The Executive Officer, Home Affairs, to request the Greffier of the States to arrange for the draft Law to be lodged ‘au Greffe’ and to be taken into consideration by the States on 17th June 2008.
Signature:		Position: Minister for Home Affairs
Date Signed:		Date of Decision (If different from Date Signed):

Customs and Excise Law (Amendment No. 6) 200-.

REPORT

The purpose of this draft Law is to amend the Customs and Excise (Jersey) Law 1999 by inserting new provisions designed to implement, in part, Special Recommendation IX on Terror Financing of the Financial Action Task Force (“FATF”).
The new provisions will cover the cross-border elements of the requirements of Special Recommendation IX; other elements, relating to seizures of cash suspected of being related to criminal activity within the Island will be implemented by means of the draft Proceeds of Crime (Cash Seizures) (Jersey) Law 200-, which was adopted by the States at the end of 2007.
As States Members know, the Government of Jersey has decided, as a matter of policy, to implement the 40 Recommendations and 9 Special Recommendations of the FATF.
Special Recommendation IX requires that -

“Countries should have measures in place to detect the physical cross-border transportation of currency and bearer negotiable instruments, including a declaration system or other disclosure obligation.

Countries should ensure that their competent authorities have the legal authority to stop or restrain currency or bearer negotiable instruments that are suspected to be related to terrorist financing or money laundering, or that are falsely declared or disclosed.

Countries should ensure that effective, proportionate and dissuasive sanctions are available to deal with persons who make false declaration(s) or disclosure(s). In cases where the currency or bearer negotiable instruments are related to terrorist financing or money laundering, countries should also adopt measures, including legislative ones consistent with Recommendation 3 and Special Recommendation III, which would enable the confiscation of such currency or instruments.”

As the FATF Best practice guide on Special Recommendation IX says at paragraphs 3 and 4 -

“3. Reporting by intelligence and law enforcement indicates that cash smuggling is one of the major methods used by terrorist financiers, money launderers and organised crime figures to move money in support of their activities. Over many years, FATF typologies exercises have repeatedly highlighted the key role that cash couriers often play in money laundering operations. However, in recent years, evidence has emerged that cash couriers also play a significant role in the international financing of terrorism.

4. Cash couriers use a variety of methods to smuggle cash; however, a preferred method is the use of commercial airlines for the following reasons: (1) the passenger (courier) can stay close to his money during transport, (2) many foreign destinations can be quickly reached; and (3) little preplanning is required. Land border crossings also offer advantages to the cash courier, including the ability to conceal the currency in the courier’s vehicle. Another leading method of cash smuggling is through the mail.”

The Special Recommendation permits the use of, either, a customs declaration system or a disclosure system as the means of implementation.
In essence, a declaration system would require everyone making a physical cross-border transportation of currency or negotiable instruments over the maximum threshold to make a declaration to the customs authorities.
This type of system is thought to be resource intensive, when compared to a disclosure system. It has, therefore, been decided to introduce a disclosure system for personal imports/exports of currency.
A disclosure system requires all persons making a physical cross-border transportation of currency or bearer negotiable instruments to make a truthful disclosure to customs on request.
Hence, the provisions of the new Part 5A of the Customs and Excise Law would empower a customs officer to require any person entering or leaving Jersey to disclose any “cash” in an amount over the prescribed limit of £10,000, to produce his or her baggage for inspection and to answer questions about such cash. Failure to make a disclosure, making a false disclosure and failure to produce the luggage will be a criminal offence and will result in rendering any cash concerned liable to forfeiture.
The new Part 5A would also give Customs Officers powers to search persons and ships and aircraft for cash. It will also make provision as to imports or exports of cash by post.
If a Customs officer suspects, from the information he receives as a result of a request for disclosure or inspection of baggage etc., that any cash may be “tainted” (i.e. related to terrorism or money laundering), he may use the powers under the Cash Seizure Law to detain it and the provisions of that Law as to seizure and forfeiture will apply.

Manpower and Resources

It is not possible to predict the resource implications of the proposed amending Law with any accuracy, but a significant increase in resource requirements would seem unlikely. The situation will be monitored post implementation.

European Convention on Human Rights

In accordance with the provisions of Article 16 of the Human Rights (Jersey) Law 2000, and in the view of the Minister for Home Affairs, the provisions of the Draft Customs & Excise (Amendment No. 6)(Jersey) Law 200- are compatible with the Convention Rights.

http://sojedmdav/livelinkdav/enterprise/Law Officers/CHEL/Richard Whitehead/AIM 1 Files/HACLEGA/HACLEGA-006 Customs and Excise (A5) (J) Law 200-/HACLEGA-006 Report 17 01 08.doc